Choose Prestigious School ($$$) or State School ($)

Has he visited both schools? If so, which one does he prefer? If not, visit both and see which school he thinks would provide the best overall experience.

50k in debt weighed against 40k in cash.

600 a month or so in payments for 10-20 years vs 40k in an IRA or even a house for 40.

How is this even a question?

Count me in the tOSU group. No prestige or name brand is worth the difference. between $50,000+ (the cost WILL increase every year) debt and $60,000 in one’s pocket at graduation.

Why is this even a question? Any school costing $70,000, in my view, is unaffordable to this family and should be off the table. The parents are stretching to pay the first year. How are they going to make it all four years, assuming 5% annual increases (that $70,000 freshman COA may top $80,000 senior year)? Way too much stress on everyone.

Northwestern hasn’t released their RD decisions so I’m not sure how you would know that NU is a choice yet or how you would logically narrow it down between NU and OSU. The only people who have their decisions are the ones who applied ED. You should wait until you actually have the decisions and packages before making this hypothetical post.

WUSTL also has not released RD decisions unless he got a likely letter or applied ED to two schools…

And Berkeley decisions are not out yet either.

If your friend applied ED, then he signed a form to state he’d attend. It wasn’t “I’ll attend unless I get a scholarship from tOSU” but "I’ll attend if you admit me. " He was given the possibility of turning down northwestern when he received his financial aid package, too, and didn’t.

Or is this a hypothetical ??

And this is your thread from May of last year: Why I Chose Berkeley Over Johns Hopkins, Georgetown, Cornell, Vanderbilt, CMC, and UCLA

What’s the story?

OSU

The OP already said they are posting for a friend.

To me this is not even a question.

Northwestern would end in $60,000 of debt, and the OP’s friend isn’t even sure that he’d be able to get all of those loans - students can only borrow $5,500 in their first year. The OP’s friend’s parents would have to co-sign for an additional $10,000 per year. Not a good idea.

Ohio State would not only end in no debt for the student BUT the parents would also be giving the student somewhere in the area of $60,000 ($140,000 pledged to the student - $80,000 to pay for school = $60,000).

The major is irrelevant. It’s risky to choose a college on the basis of future earnings predicated on major because 1) students change majors all the time and 2) people leave and change fields all the time. That’s true even for a student who is “sure” about what she wants to do; it’s even more true for a student who doesn’t know what she wants to do. “Pre-med, or engineering, or business” is pretty much the same as simply being undecided (my interests at 17 were “pre-law, or pre-med, or international affairs” and I did none of those things).

But even if we considered major, it’s ALWAYS good to minimize your debt if you can - particularly for business school and med school, both of which are expensive. (Yes, we can always hope that the employer will pay for an MBA - but there are many reasons you may want or need to pay for your own. Plus, your employer’s tuition coverage might not cover the entire cost of an MBA you want).

A couple people have commented that Northwestern is better known in “business circles.” Business is such a broad term that includes a lot of different areas. Sure, Northwestern is a target school for top-level consulting firms and investment banks, but an Ohio State graduate is perfectly capable of getting a great job in “business” (which is basically anything) after college. it’s an excellent, well-reputed school.

Besides, if the OP does get an MBA, then her undergrad school becomes more or less irrelevant. Better to save the extra $60,000 to offset the costs of the MBA; right now, that could pay for one year of an MBA (or maybe a little less) at a very prestigious program. Could you imagine having an Ohio State BA and a Harvard MBA with only $60K of debt, and getting some consulting job that pays like $140K out of the MBA?

@juillet Responding to your first paragraph- It’s hard to say what OP would pay at an elite school, for starters, they don’t have decisions on admission for any of the elite schools and NU has just recently expanded their financial aid. The NPC have no been updated to reflect the new aid available and new the new “no loan” policy.

But ditto for everything else.

As for the $60K cash gift from the parents, I struggle to believe that a family that has that much laying around is getting $10K in grant money.

There are a lot of questions to be answered OP.

“Also, starting next year, amount of debt for donut hole students will be capped, so he should call northwestern to see whether that’ll apply to him and his fa package.”

Huge point!

@CaliCash assets have only a small effect on aid compared to income. And at some expensive private schools with endowments, parents can be at $150k annual income and still get $10k. That’s grants from the school, not federal aid.

@Sportsman88 I know that income primarily drives financial aid. However, $150K is not by any means wealthy and I just struggle to buy that an upper- middle class family would have the resources for that.

Trust me, I know, especially of you are in an area with high housing costs which don’t seem to be taken into account in formulas.

While $150,000 income is not in the range of buying politicians and other things that the super wealthy buy, it is about three times the median household income in the US, and probably double the median even in expensive metro areas.

Depending on their circumstances, they might get much more than that.
According to the College Board’s Net Price Calculator, for a couple making $150K (with 1 child, no home equity, $7500 in itemized deductions, and $75K in savings) I get an estimate of $24,850 in institutional grant aid from Northwestern University.

Trinity College is one of the less selective colleges that claims to meet full need.
For Trinity College families making $150K or more and receiving n-b aid, the mean n-b aid package is worth $25,062.
(http://www.trincoll.edu/AboutTrinity/offices/InstitutionalResearchPlanning/Documents/financialAid.pdf).

YMMV. More children could increase the aid amount. More parental assets could decrease it , but maybe not as much as you’d think. Doubling the parents’ savings (from $75K to $150K in my estimate) decreases the Northwestern grant from $24,850 to $22,650. After also adding $75K in home equity, the estimated grant aid doesn’t decrease any more.

Still, even a $25K grant leaves an EFC of over $35K/year for many private schools like NU. That is indeed a lot to cover for a family making $150K/year.

@CaliCash - I was going by what the OP said in their original post:

  • I have the choice between a pretty prestigious college (Northwestern/Berkeley/WashU) that would cost around $50K per year (around $15K in loans per year, ~$60K total loans) or a state school, THE Ohio State U ($10K a year, meaning I’d spend a total of $40K for all of college) for undergrad.*

I was assuming the OP was laying out known information.

I also agree with @ucbalumnus . $150K is upper-middle-class, bordering on wealthy. Even in Manhattan the median income is around $67K, so $150K is more than twice that. People always mention high housing costs, and that’s true, but a family making $150K in Manhattan is still living pretty nicely - better than 80-90% of everyone else living in Manhattan (and probably the country).

At Columbia I believe full pay was around $200K, so I’m not terribly surprised that $150K results in just a $10K grant. The theory is that a family in that income bracket will combine savings (from a 529 plan or something similar) with future income (i.e. loans) to make it work…or that child won’t go to an expensive private school.

An update. (also, thanks to intparent who clarified that this is NOT me, I’m attending college already).

As for the numbers, they are accurate. Financial aid estimates that you can do online are generalizations @tk21769 and this family contacted the FA offices with tax forms and numbers due to their unique tax situation and the estimates I’ve given are from the FA office (is what I’ve been told).

I asked him to clarify what he wanted to do and he replied this:

"I’m very interested in small business and entrepreneurship - my biggest goal is start my own family-owned company (mid-sized business).

I’d like to study computer science/engineering with courses in finance/accounting mainly because of the flexibility and I like the material.

Grad-school wise, while I don’t want to eliminate options, I probably don’t want to attend anything unless it’s an MBA. I don’t see myself going through medical school or law school, but I know that this can change.

If not entrepreneurship, I’d like to work in larger companies (Fortune XXX) to learn by doing and climb up the responsibility ladder in a business role.
"

What do you guys think? I don’t know what the answer is because of his unique goals.

@berkvard

“If not entrepreneurship, I’d like to work in larger companies (Fortune XXX) to learn by doing and climb up the responsibility ladder in a business role.”

In that case, he should either try to go into a corporate graduate training program (e.g. General Electric) or join a blue-chip consulting firm upon graduation, such as Bain or McKinsey and move into a more senior role at a Fortune 500 firm 5 or 10 years later. In either case, a BA/BS degree from Northwestern U will just open more doors and make the transition easier than a degree from Ohio State. I’m not saying that it is impossible to get these jobs from OSU, it is just harder for an OSU grad compared to a NU grad.

@berkvard So your friend is just not gonna address the fact that he is lying about his admissions decisions? This is all hypothetical.